NEPAL RASTRA BANK. Statement of Financial Position. Note

Transcription

1

2 NEPAL RASTRA BANK Statement of Financial Position As on 31 st Asadh, 2072 (16 th July, 2015) PARTICULARS ASSETS Note As on As on Foreign Currency Financial Assets Cash and Bank Balances 1 36,536,975,471 32,537,909,759 IMF Related Assets : Special Drawing Right Holdings 4,119,794,209 5,488,119,248 Investments 2 686,405,859, ,880,479,341 Other Receivables 1,612,794,945 1,022,408,013 Total Foreign Currency Assets 728,675,423, ,928,916,361 Local Currency Financial Assets Cash and Bank Balances 3,703,331,845 6,432,623,698 Investments in Government Securities 3 23,393,930,517 29,038,710,569 GON Overdraft - - Investments in Financial and Other Institutions 4 2,407,211,888 1,528,910,670 Other Investments 5 15,096,487,000 14,918,621,000 Loans & Receivables and Refinance 6 7,918,102,710 5,935,936,213 Other Receivables 7 2,933,278,319 3,690,892,903 Sub-Total 55,452,342,279 61,545,695,053 Other Assets Gold and Silver Stock 8 1,713,541, ,129,138 Other Inventories 9 2,101,384,476 2,654,213,271 Property, Plant & Equipment ,066, ,507,794 Intangible Assets ,936, ,809,344 Other Assets 357,108, ,190,887 Sub-Total 5,120,036,822 4,617,850,434 Total Local Currency Assets 60,572,379,101 66,163,545,487 Total Assets 789,247,802, ,092,461,848 Contingent Assets 22c Notes 1 to 22 are integral parts of the Statement of Financial Position As per our report of the even date... Directors......:-.. Pradip Raj Pandey (Executive Director) As per.. our.... report of.... the.... even.. Board of Directors:- (Sukdev Khatry) Deputy Auditor General.. Dr. Chiranjibi Nepal Lok Darshan Regmi (Governor) (Director/Secretary MOF)... (CA. Gopal Prasad Rajbahak) (CA. Sunir Kumar Dhungel).. Chartered Accountant Chartered Accountant Gopal Prasad Kaphle Maha Prasad Adhikari Kathmandu Kathmandu (Deputy Governor) (Deputy Governor).... Dr. Sri Ram Poudyal Dr. Ram Hari Aryal (Director) (Director). Date: 2072/09/07 Bal Krishna Man Singh Place : Kathmandu (Director)

3 NEPAL RASTRA BANK Statement of Financial Position As on 31 st Asadh, 2072 (16 th July, 2015) PARTICULARS LIABILITIES Note As on As on Foreign Currency Financial Liabilities Deposit from Banks and Other Agencies 12 3,119,269,500 2,060,832,427 IMF Related Liabilities 13 15,690,325,500 17,612,855,208 Other Liabilities ,593, ,340,057 Total Foreign Currency Liabilities 19,150,188,703 19,823,027,692 Local Currency Financial Liabilities IMF Related Deposit Liabilities 15 8,361,984,449 7,030,604,523 GON Deposit 34,529,399,452 23,334,581,772 Deposit and Other Balances ,998,489, ,899,915,770 Bills Payable 388,903,157 1,005,959,657 Staff Liabilities 17 15,934,081,941 12,871,285,299 Other Payables 18 65,531,046,992 20,563,407,798 Sub-Total 328,743,905, ,705,754,819 Other Liabilities Currency in Circulation ,080,000, ,250,000,000 Surplus Payable to GoN 7,000,000,000 7,000,000,000 Sundry Liabilities 20 4,191,134,970 5,176,768,632 Sub-Total 330,271,134, ,426,768,632 Total Local Currency Liabilities 659,015,040, ,132,523,451 EQUITY Capital 3,000,000,000 3,000,000,000 Reserves ,082,573, ,136,910,705 Total Equity 111,082,573, ,136,910,705 Total Liabilities and Equity 789,247,802, ,092,461,848 Contingent Liabilities and Commitments 22b Notes 1 to 22 are Integral Parts of the Statement of Financial Position As per our report of the even date... Directors......:-.. Pradip Raj Panday (Executive Director) As per.. our.... report of.... the.... even.. Board of Directors:- (Sukdev Khatry) Deputy Auditor General.. Dr. Chiranjibi Nepal Lok Darshan Regmi (Governor) (Director/Secretary MOF)... (CA. Gopal Prasad Rajbahak) (CA. Sunir Kumar Dhungel).. Chartered Accountant Chartered Accountant Gopal Prasad Kaphle Maha Prasad Adhikari Kathmandu Kathmandu (Deputy Governor) (Deputy Governor).... Dr. Sri Ram Poudyal Dr. Ram Hari Aryal (Director) (Director). Date: 2072/09/07 Bal Krishna Man Singh Place : Kathmandu (Director)

4 NEPAL RASTRA BANK Statement of Comprehensive Income FOR THE YEAR ENDED 31 st ASHADH, 2072 (16 th JULY, 2015) PARTICULARS Note For the Year Ended For the Year Ended Operating Income: Income from Foreign Currency Financial Assets Interest Income 23 17,359,935,344 14,836,956,104 Commission Income 24 16,827,248 2,089,018 Sub-Total 17,376,762,592 14,839,045,122 Expenses on Foreign Currency Financial Liabilities Interest Expenses 25 5,895,791 9,568,784 Agency and Service Charge 26 27,075,395 21,522,886 Sub-Total 32,971,186 31,091,670 Net Income from Foreign Currency 17,343,791,406 14,807,953,452 Income from Local Currency Financial Assets Interest Income ,441,197 1,482,184,656 Commission Income 24 54,382,228 59,386,491 Sub-Total 1,028,823,425 1,541,571,147 Expenses on Local Currency Financial Liabilities Interest Expenses ,576,270 34,885,548 Agency and Service Charge ,958, ,524,107 Sub-Total 301,534, ,409,655 Net Income from Local Currency Financial assets 727,288,473 1,358,161,492 Other Operating Income ,210, ,656,200 Total Net Operating Income 18,457,290,655 16,353,771,144 General, Administrative Expenses & Provisions 28 7,693,461,579 7,557,268,158 Profit before Foreign Exhange and Revaluation Gain/(Loss) 10,763,829,076 8,796,502,986 Net Foreign Exchange Gain 2,528,753,969 4,237,837,030 Net Gold and Silver Revaluation Gain/(Loss) (1,224,363,057) 515,927,005 Securities Revaluation Gain/(Loss) (858,021) 289,378 NET PROFIT FOR THE YEAR 12,067,361,967 13,550,556,399 Other Comprehensive Income Changes in Fair Value of Investment in Equity Instruments 878,301,218 1,026,956,250 Actuary Gain on Defined Benefit Plan of Employee Benefit - (278,584,203) Other Comprehensive Income for the Year 878,301, ,372,047 TOTAL COMPREHENSIVE INCOME 12,945,663,185 14,298,928,446 Notes 23 to 28 are Integral Parts of the Statement of Comprehensive Income.. As per our report of the even date. Pradip Raj Panday (Executive Director).. Board of Directors:- (Sukdev Khatry) Deputy Auditor General.. Dr. Chiranjibi Nepal Lok Darshan Regmi (Governor) (Director/Secretary MOF)... (CA. Gopal Prasad Rajbahak) (CA. Sunir Kumar Dhungel).. Chartered Accountant Chartered Accountant Gopal Prasad Kaphle Maha Prasad Adhikari Kathmandu Kathmandu (Deputy Governor) (Deputy Governor).... Dr. Sri Ram Poudyal Dr. Ram Hari Aryal (Director) (Director). Bal Krishna Man Singh Date: 2072/09/07 (Director) Place : Kathmandu

5 NEPAL RASTRA BANK STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 st ASHADH, 2072 (16 th JULY, 2015) For the Year Ended For the Year Ended PARTICULARS Cash Flow From Operating Activities: Total Comrehensive Income for the Year 12,945,663,185 14,298,928,446 Adjustments: Gold and Silver Revaluation (gain)/loss (Net) 1,224,363,057 (515,927,005) Revaluation (Gain) or Loss on Foreign Exchange (2,290,312,874) (4,265,005,927) Securities Revaluation Gain (877,443,197) (1,027,245,628) Actuarial Gain/Loss - 278,584,203 Depreciation & Amortisation 86,503,030 86,188,938 Note Printing Expenses 1,080,986, ,518,005 Dividend Income (7,365,111) (6,767,324) Provisions no Longer Required Written Back (255,301,310) (18,208,463) Grant Income (115,825) (245,446) Profit from Sale of Assets/ Investments (4,470,262) (806,484) Assets Written Off 191,212 39,854 Interest paid on ECF Loan & ACU 5,692,245 9,588,339 Loan and advances - - Diminution in value of investment - - Provision for Doubtful Sundry Accruals - - Provision for Doubtful Investment - 2,500,000 Provision Others - - Cash Flow From Operation Before Inc / Dec in Operating Assets 11,908,390,872 9,765,141,509 (Increase)/Decrease in Operating Assets (8,215,077,779) (3,165,307,152) Refinance & Loans (1,982,166,497) 1,004,702,273 Gold & Silver (5,881,063,815) (1,452,643,245) Inventories (528,157,926) (2,283,704,337) Other Receivable 176,310,459 (433,661,843) Increase/(Decrease) in Operating Liabilities 77,612,438,504 75,769,271,231 Government Deposit 11,194,817,680 22,818,496,828 SDR Allocation (465,665,058) 346,014,063 Deposit Liabilities 20,488,390,601 38,817,340,374 Bills Payable (617,056,500) 268,054,071 Deferred Staff Liabilities 3,062,796,642 3,840,005,033 Other Liabilities 44,934,788,802 20,360,633,482 Sundry Liabilities (985,633,662) (10,681,272,620) Net Cash Flow From Operating Activities Total (A) 81,305,751,597 82,369,105,588 Cash Flow From Investing Activities: Net (Incr)/Decr in Government Securities and Bank Deposits (43,600,387,009) 37,019,617,876 Sale/Purchase of Investment in Financial Institutions 4,800,000 (45,880,000) Purchase of Investments-Other 72,635,310 (343,902,537) Purchase of Property, Plant & Equipment (134,620,316) (211,200,737) Sale of Property, Plant & Equipment 4,789,058 1,356,250 Purchase of Intangible Assets (3,892,049) (1,153,730) Dividend Income 7,365,111 6,767,324 Net Cash Flow From Investing Activities Total (B) (43,649,309,896) 36,425,604,446 Cash Flow From Financing Activities: Bank Note Issued 45,830,000,000 39,790,000,000 Increase/Decrease in ECF Loan & ACU (1,456,864,650) (1,076,547,049) Interest Paid on ECF Loan & ACU (5,692,245) (9,588,339) Surplus Paid to GON (7,000,000,000) (5,500,000,000) Net Cash Flow From Financing Activities Total (C) 37,367,443,105 33,203,864,612 Net Cash Flow for the Year (A+B+C) 75,023,884, ,998,574,646 Revaluation Gain or Loss on Foreign Exchange 2,290,312,874 4,265,005,927 Cash and Cash Equivalent at the Beginning of the Year 491,317,147, ,053,567,282 Cash and Cash Equivalent at the end of the Year (Note - 29) 568,631,345, ,317,147,855 Note 29 is the Integral Part of the Statement of Cash Flows.. Pradip Raj Panday (Executive Director) Board of Directors:- As per our report of the even date... (Sukdev Khatry) Deputy Auditor General.. Dr. Chiranjibi Nepal Lok Darshan Regmi (Governor) (Director/Secretary MOF)..... (CA. Gopal Prasad Rajbahak) (CA. Sunir Kumar Dhungel) Gopal Prasad Kaphle Maha Prasad Adhikari Chartered Accountant Chartered Accountant (Deputy Governor) (Deputy Governor) Kathmandu Kathmandu.. Dr. Sri Ram Poudyal (Director).. Dr. Ram Hari Aryal (Director). Bal Krishna Man Singh Date: 2072/09/07 (Director) Place : Kathmandu

6 PARTICULARS Capital General Reserve Statutory Reserve Monetary Liability Reserve NEPAL RASTRA BANK Statement of Changes in Equity FOR THE YEAR ENDED 31 st ASHADH, 2072 (16 th JULY, 2015) Exchange Equilisation Fund Gold & Silver Equilisation Reserve Balance as on 1 st Shrawan ,000,000,000 18,999,509,398 2,501,376,500 58,089,470,285 5,188,627, ,738, ,478, ,584,203 8,594,144,260 53,309 97,837,982,259 Adjustment for Prior Period Income - Restated Balance 3,000,000,000 18,999,509,398 2,501,376,500 58,089,470,285 5,188,627, ,738, ,478, ,584,203 8,594,144,260 53,309 97,837,982,259 Net Profit for the year 13,550,556,399 13,550,556,399 Other Comprehensive Income 1,026,956,250 (278,584,203) 748,372,047 Appropriation of Profit: To General Reserve 1,369,664,795 (1,369,664,795) - To Monetary Liability Reserve 449,377,398 (449,377,398) - To Exchange Equilisation Fund 4,265,005,927 (4,265,005,927) - To Gold & Silver Equilisation Reserve 515,927,005 (515,927,005) - To Revaluation Reserve 289,378 (289,378) - To Other Reserve 168,505,757 (168,505,757) - Inter Fund Transfer: - Gold & Silver to General Reserve - Other Reserve to General Reserve 175,675,657 (175,675,657) - Balance Profit Transfer to Government (7,000,000,000) (7,000,000,000) Balance as on 1 st Shrawan ,000,000,000 20,544,849,850 2,950,753,898 62,354,476,212 5,704,554,193 1,357,695, ,767,574-8,586,974,360 (218,160,552) 105,136,910,705 - Net Profit for the year 12,067,361,967 12,067,361,967 Other Comprehensive Income 878,301, ,301,218 Appropriation of Profit: - To General Reserve 1,123,982,900 (1,123,982,900) - To Monetary Liability Reserve 539,205,481 (539,205,481) - To Exchange Equilisation Fund 2,290,312,874 (2,290,312,874) - To Gold & Silver Equilisation Reserve (1,224,363,057) 1,224,363,057 - To Revaluation Reserve (858,021) 858,021 - To Other Reserve 2,120,921,238 (2,120,921,238) - Inter Fund Transfer: - Gold & Silver to General Reserve - Other Reserve to General Reserve 76,605,926 (76,605,926) - Balance Profit Transfer to Government (7,000,000,000) (7,000,000,000) Balance as on 31 st Asadh ,000,000,000 21,745,438,676 3,489,959,379 64,644,789,078 4,480,191,136 2,235,996, ,909,553-10,631,289,672 (0) 111,082,573,884 Board of Directors: As per our report of the even date... As per.... our.... report of.... the even date.. Dr. Chiranjibi Nepal.. Directors : Lok.... Darshan Regmi.... Pradip Raj Panday (Sukdev Khatry) (Governor) (Director/Secretary MOF) (Executive Director) Deputy Auditor General Fair Value Reserve Revaluation Reserve Actuary Gain/Loss Reserve Other Reserves Retained Earning Total..... Gopal Prasad Kaphle Maha Prasad Adhikari (CA. Gopal Prasad Rajbahak) (CA. Sunir Kumar Dhungel) (Deputy Governor) (Deputy Governor) Chartered Accountant Chartered Accountant Kathmandu Kathmandu..... Dr. Sri Ram Poudyal Dr. Ram Hari Aryal Bal Krishna Man Singh Date: 2072/09/07 (Director) (Director) (Director) Place : Kathmandu

7 NEPAL RASTRA BANK Notes Forming Part of the Statement of Financial Position PARTICULARS As on As on NOTE - 1: CASH AND BANK BALANCES Cash in Hand 14,303,231,270 12,058,740,446 Balance with Banks in Demand Deposits 22,233,744,201 20,479,169,313 Asian Clearing Union - - Total 36,536,975,471 32,537,909,759 NOTE - 2: INVESTMENTS i. Treasury Bills US Government Treasury Bills 15,170,924,651 14,384,833,134 GOI Treasury Bills 173,882,165, ,683,427,779 Other Treasury Bills 10,289,208, ,360,000 Sub -Total 199,342,298, ,483,620,913 ii. Other US Government Treasury Notes/Bond 60,579,350, ,875,004 Other Government Notes/Bond 46,718,723,257 22,626,757,641 Investment in Mid Term Instrument 7,842,427,539 8,691,201,766 Investment in Fixbis 7,172,535,534 7,449,373,607 Investment in Repurchase Agreement (Repo) 58,125,602,000 40,110,588,469 Balance with Banks in Time Deposits 287,097,848, ,677,276,701 Gold 19,527,073,391 15,882,785,239 Sub -Total 487,063,560, ,396,858,428 Grand Total 686,405,859, ,880,479,341 Above Investments are Classified as Follows: Loans and Receivables - - Held-for-trading 77,652,675,391 55,993,373,709 Held-to-maturity 593,582,259, ,875,514,858 Available-for-sale 15,170,924,651 14,384,833,134 Total 686,405,859, ,253,721,701 NOTE - 3: INVESTMENTS IN GOVERNMENT SECURITIES Government Treasury Bills 17,965,212,474 22,048,574,714 Saving Certificates 528,992,000 1,284,068,000 Government Bond 4,899,726,043 4,949,991,745 Development Bond 2071 Gha - 756,076,110 Total 23,393,930,517 29,038,710,569 Above Investments are Classified as Follows: Loans and Receivables 4,871,051,043 4,871,051,043 Held-for-trading - - Held-to-maturity 28,675, ,016,812 Available-for-sale 18,494,204,474 23,332,642,714 Total 23,393,930,517 29,038,710,569

8 NEPAL RASTRA BANK Notes Forming Part of the Statement of Financial Position PARTICULARS As on As on NOTE - 4: INVESTMENTS IN FINANCIAL AND OTHER INSTITUTIONS % of holding (a) Investment in Shares of Subsidiaries Sudur Pashchimanchal Grameen Bikash Bank Ltd ,050,000 Agricultural Project Services Centre ,000,000 5,000,000 Rastriya Beema Sansthan - Life Insurance ,000,000 1,000,000 Sub-Total 6,000,000 46,050,000 (b) Investment in Shares of Associates Nepal Stock Exchange Ltd ,080,500 12,080,500 National Productivity and Economic Development ,500,000 2,500,000 Sub-Total 14,580,500 14,580,500 (c) Other Investments Shares: Deposit & Credit Guarantee Corporation ,580, ,580,000 Nepal Clearing House ,000,000 15,000,000 Rural Microfinance Development Centre ,045,000 21,045,000 Pashchimanchal GBB - - 6,000,000 Nepal Development Bank ,000,000 Credit Information Bereau ,500,000 3,500,000 Citizen Investment Trust ,236,006,388 1,357,705,170 National Banking Training Centre ,000,000 5,000,000 Nepal Grameen Bikas Bank Limited ,050,000 - Sub-Total 2,434,181,388 1,531,830,170 Total 2,454,761,888 1,592,460,670 Less: Provision for diminution in the value 47,550,000 63,550,000 Total 2,407,211,888 1,528,910,670 NOTE - 5: OTHER INVESTMENTS Investment of Funds: Fixed Deposits with Commercial Banks and Financial Institutions 15,790,732,000 15,863,367,310 Less: Provision for doubtful Investment 947,645,000 1,198,146,310 Sub-Total 14,843,087,000 14,665,221,000 Other Investments: Investment in Rural Self Reliance Fund 253,400, ,400,000 Sub-Total 253,400, ,400,000 Grand Total 15,096,487,000 14,918,621,000

9 NEPAL RASTRA BANK Notes Forming Part of the Statement of Financial Position PARTICULARS As on As on NOTE - 6: LOANS & RECEIVABLES AND REFINANCE LOANS AND RECEIVABLES Loans to Employees 4,666,599,428 4,012,947,525 Loan to Other Organisations 31,000,000 12,000,000 Sub-Total 4,697,599,428 4,024,947,525 REFINANCE Refinance to Commercial Banks 3,230,503,281 1,920,988,688 Securities Purchased Under Resale Agreement - - Refinance to Financial Institutions - - 3,230,503,281 1,920,988,688 Less: Provision for Doubtful Loans 10,000,000 10,000,000 Sub-Total 3,220,503,281 1,910,988,688 Total 7,918,102,710 5,935,936,213 NOTE - 7: OTHER RECEIVABLE Interest Accrued 2,034,187,919 2,270,201,817 Less: Provision for Doubtful Amounts - - Less: Interest Suspense 489,803, ,984,821 Net Interest Accrued 1,544,384,410 1,799,216,996 Advances Recoverable 1,314,005,129 1,759,838,274 Less: Provision for Doubtful Amounts 10,329,878 10,329,878 Net Advance Recoverable 1,303,675,251 1,749,508,396 Deposits 1,676,504 1,674,504 Project Income Recoverable 20,545,838 15,223, ,996, ,269,437 Total 2,933,278,319 3,690,892,903 NOTE - 8: GOLD & SILVER STOCK Gold Held in Stock 1,610,653, ,924,161 Silver Held in Stock 102,887,870 88,204,977 Total Gold and Silver Stock 1,713,541, ,129,138 NOTE - 9: OTHER INVENTORIES Security Note Stock 1,617,408,259 2,067,232,881 Coin Stock 472,476, ,568,586 Numismatic and Medallion Coins 23,366,886 22,465,540 Other Metal Stock 22,485,498 24,461,508 Dispensory Stock 604, ,808 Total Inventories 2,136,341,527 2,689,170,323 Less: Provisions For: Non-moving Numismatic and Medallion Coins (22,465,794) (22,465,794) Non-moving Other Metal Stock (8,716,000) (8,716,000) Unissuable Note Stock (3,775,258) (3,775,258) Total Inventories Net of Provisions 2,101,384,476 2,654,213,271

10 Ac cu m Or igi nal Ac cu m Or igi nal RASTRA BANK e Statement of Financial Position NOTE - 10 : STATEMENT OF PROPERTY, PLANT & EQUIPMENT Computer & Machinery Office Furniture and Particulars Land Building Vehicles Other Assets Accessories Equipment Equipment Fixture Depreciation Rate 3% 20% 20% 20% 20% 10% 20% Capital Work in Progress Balance as on 1 st Shrawan ,334, ,267, ,836, ,685, ,364, ,398,319 21,564,542 4,635,737 15,569,468 Addition during the Year 162,500,000 28,879,048 10,487,851 3,392,730 3,256,504 3,615, ,122 49,494 9,357,615 Disposal/Write Off/Adjustment - - (10,209,889) (5,125,603) (942,400) (3,470,866) - (34,465) (10,908,486) Balance as on 32 nd Ashadh ,834, ,146, ,114, ,952, ,678, ,543,313 22,134,663 4,650,766 14,018,597 Balance as on 1 st Shrawan ,245, ,721, ,924,009 98,276,817 76,828,905 17,392,566 4,486,788 Depreciation for the Year - 17,183,908 15,611,241 15,745,230 4,672,251 7,967, ,068 25,870 Disposal/Write Off/Adjustment - (53,710) (10,209,734) (4,575,850) (942,398) (3,496,317) - (34,465) Balance as on 32 nd Ashadh ,375, ,123, ,093, ,006,670 81,300,438 18,188,634 4,478,192 - e as on 32 nd Ashadh ,834, ,771,051 48,991,240 34,859,418 9,671,457 21,242,874 3,946, ,574 14,018,597 Balance as on 1 st Shrawan ,834, ,146, ,114, ,952, ,678, ,543,313 22,134,663 4,650,766 14,018,597 Addition during the Year - 13,280,354 26,792,828 74,761,900 1,749,631 15,758,698 1,059,535 89,330 11,437,870 Disposal/Write Off/Adjustment - - (6,765,720) (18,712,319) (3,075,234) (3,445,924) (197,470) - (10,309,829) Balance as on 31 st Ashadh ,834, ,427, ,141, ,002, ,352, ,856,087 22,996,728 4,740,096 15,146,638 Balance as on 1 st Shrawan ,375, ,123, ,093, ,006,670 81,300,441 18,188,632 4,478,183 Depreciation for the Year - 17,809,260 16,456,164 14,742,572 4,272,651 8,594, ,944 36,482 Disposal/Write Off/Adjustment - - (6,765,589) (18,393,642) (3,075,220) (3,445,888) (192,366) - Balance as on 31 st Ashadh ,185, ,813, ,442, ,204,102 86,449,235 18,822,210 4,514,666 - e as on 31 st Ashadh ,834, ,242,144 59,327,777 94,560,069 7,148,422 28,406,851 4,174, ,431 15,146,638 Allowances for obsolescences has been made for Rs. 3,352,949 on Building under Construction which is presented under Capital Work in Progress

11 Total Assets 1,227,656, ,109,224 (30,691,709) 1,419,074, ,876,412 62,002,419 (19,312,475) 727,566, ,507,794 1,419,074, ,930,145 (42,506,496) 1,521,497, ,566,345 62,737,754 (31,872,705) 758,431, ,066,404

12 Accumultaed Amortisation Original Cost Accumultaed Amortisation Original Cost NEPAL RASTRA BANK Notes Forming Part of the Statement of Financial Position NOTE - 11 : INTANGIBLE ASSETS Amortisaction Rate Particulars Useful Life Defined by Contractual Agreements 20% 10% Capital Work in Progress Balance as on 1 st Shrawan ,913,092 3,949, ,272, ,135,175 Addition during the Year 950, ,400 1,153,730 Disposal/Write Off/Adjustment - Balance as on 32 nd Ashadh ,913,092 4,899, ,272, , ,288,905 Balance as on 1 st Shrawan ,844,416 3,627,410 3,821,216-12,293,042 Depreciation for the Year 939, ,620 22,927,293 24,186,519 Disposal/Write Off/Adjustment Balance as on 32 nd Ashadh ,784,023 3,947,029 26,748,509-36,479,561 Net Book Value as on 32 nd Ashadh 2071 Computer Software Other Useful Life Total Assets 1,129, , ,524, , ,809,344 Balance as on 1 st Shrawan ,913,092 4,899, ,272, , ,288,905 Addition during the Year 2,229,009 1,663,040 3,892,049 Disposal/Write Off/Adjustment - Balance as on 31 st Ashadh ,913,092 7,128, ,272,935 1,866, ,180,954 Balance as on 1 st Shrawan ,784,023 3,947,029 26,748,509-36,479,561 Depreciation for the Year 647, ,066 22,927,293 23,765,276 Disposal/Write Off/Adjustment Balance as on 31 st Ashadh ,431,939 4,137,095 49,675,803-60,244,837 Net Book Value as on 31 st Ashadh ,153 2,991, ,597,132 1,866, ,936,117

13 NEPAL RASTRA BANK Notes Forming Part of the Statement of Financial Position PARTICULARS As on As on NOTE - 12: DEPOSIT FROM BANKS AND OTHER AGENCIES Deposit from Banks and Financial Institutions 2,619,265,290 1,424,678,999 Foreign Diplomatic Missions and Other Agencies 500,004, ,153,427 Total 3,119,269,500 2,060,832,427 NOTE - 13: IMF RELATED LIABILITIES Special Drawing Right Allocation 9,668,100,070 10,133,765,128 Interest Bearing Loan : Loan under Rapid Credit Facility (RCF) 4,048,984,400 4,244,004,160 Loan under Extended Credit Facility (ECF) 1,973,241,030 3,235,085,920 Total 15,690,325,500 17,612,855,208 NOTE - 14: OTHER LIABILITIES Interest Payable 1,033,950 1,517,249 Bills Payable - - Asian Clearing Union 354,859, ,825,826 Others (15,299,872) 16,996,982 Total 340,593, ,340,057 NOTE -15: IMF Related Deposit Liabilities IMF Account No 1 8,361,125,768 7,029,851,169 IMF Account No 2 858, ,354 Total 8,361,984,449 7,030,604,523 NOTE -16: DEPOSIT AND OTHER BALANCES Deposits from Banks and Financial Insitutions 189,641,903, ,159,909,996 Balances of Other Insitutions 12,657,083,879 11,239,980,017 Earnest Money 7,071,373 6,092,685 Money Changer 10,756,000 10,644,000 Margin Against LCs 1,681,674,142 2,483,289,072 Total 203,998,489, ,899,915,770 Balances of Banks and Financial institutions also include the Cash Reserve Ratio (CRR) required to be maintained by commercial banks. Balances of Other Institutions include deposit of government corporations, companies and local authorities etc.

14 NEPAL RASTRA BANK Notes Forming Part of the Statement of Financial Positio PARTICULARS As on NOTE - 17: STAFF LIABILITIES Medical Fund (Includes Medical Earning Fund, Interest, etc) 231,473,695 Welfare Provident Fund 73,064,262 Gratuity and Pension Fund 12,760,494,941 Staff Security Fund 1,875,701,464 Liability for Staff Leave Encashment 821,357,804 Liability for Retired Staff 171,989,774 Other Payable to Staff - Total 15,934,081,941 NOTE - 18: OTHER PAYABLES Deposit Collection-Auction 60,000,000,000 Reverse Repo Liabilities 5,000,000,000 Insurance Premium Collected from Staff 161,554,981 Less: Advance Insurance Premium Paid on Behalf of Staff - Other Payables of Project 369,492,012 Total 65,531,046,992 NOTE -19: CURRENCY IN CIRCULATION Currency in Circulation 319,080,000,000 The Currency in Circulation Liabilities are Supported by Following Securities : Foreign Currency Balance Held Abroad 303,472,268,000 Foreign Securities 15,607,732,000 Government Securities - Total 319,080,000,000

15 on As on ,432,311 68,939,471 9,829,898,334 1,632,609, ,755, ,649,803-12,871,285,299 20,000,000, ,808, ,599,634 20,563,407, ,250,000, ,642,268,000 15,607,732, ,250,000,000

16 NEPAL RASTRA BANK Notes forming part of the statement of financial position PARTICULARS As on As on NOTE - 20: SUNDRY LIABILITIES Sundry Creditors 376,049, ,000,000 Unclaimed Account 3,480,540 3,657,045 Bills Collection 1,701,000 5,749,931 Less: Bills Lodged 1,701,000-5,749,931 - Pension Payable to NRB Ex-Staff 73,908,545 50,585,053 General Account 186,608, ,882,068 Deferred Grant Income 115, ,773 Other Liabilities 3,550,971,095 4,602,412,692 Total 4,191,134,970 5,176,768,632

17 NEPAL RASTRA BANK Notes Forming Part of the Statement of Financial Position PARTICULARS As on As on NOTE - 21: RESERVES Capital Reserve: Gold and Silver Equalization Reserve 4,480,191,137 5,704,554,193 Statutory Reserve: General Reserve 21,745,438,676 20,544,849,850 Monetary Liabilites Reserve 3,489,959,379 2,950,753,898 Exchange Equalization Fund 64,644,789,078 62,354,476,212 Other Reserves and Funds: Development Fund 7,289,756,571 5,741,080,922 Banking Development Fund 831,941, ,941,806 Development Finance Project Mob. Fund 226,625, ,088,356 Liquidity Stabilization fund 600,000, ,000,000 Mechanisation Fund 791,316, ,316,414 Scholarship Fund 61,594,504 61,594,504 Mint Development Fund 547,712, ,712,943 Gold Replacement Fund 24,708,491 76,605,926 Investment Revaluation Reserve 854,909, ,767,574 Rural Self Reliance Fund (GS Kosh) 253,400, ,400,000 Fair Value Reserve for Equity Instruments 2,235,996,388 1,357,695,170 Project Split Interest Reserve Fund 4,233,489 4,233,489 Deficit Due to Restatement of Prior Period Errors - (218,160,552) Total Reserves and Funds 108,082,573, ,136,910,705 The Board of Directors of the Bank has Appropriated the Following Amount to Different Fund During the Year Net Profit for the Year 12,067,361,967 13,550,556,399 Transfer (to)/from Exchange Equalisation Fund (2,290,312,874) (4,265,005,927) Transfer (to)/from Gold & Silver Equalisation Reserve 1,224,363,057 (515,927,005) Securities Revaluation Fund 858,021 (289,378) Surplus/(Deficit) Due to Restatement of Prior Period Errors (218,160,552) 53,309 Profit Available for Distribution 10,784,109,619 8,769,387,398 General Reserve 1,123,982,900 1,369,664,795 Monetary Liability Reserve 539,205, ,377,398 Development Fund 1,548,675,648 53,577,563 Development Finance Project Mobilisation Fund 17,537,099 5,322,268 Liquidity Stabilization Fund 500,000,000 13,000,000 Banking Development Fund 30,000,000 20,000,000 Gold Replacement Fund 24,708,491 76,605,926 Surplus to be Transferred to GON 7,000,000,000 7,000,000,000 Surplus/(Deficit) Due to Restatement of Prior Period Errors - (218,160,552) Total 10,784,109,619 8,769,387,398

18 NEPAL RASTRA BANK Notes Forming Part of the Statement of Financial Position NOTE - 22a : Movement of Provisions. Particulars As on Addition Withdrawn Adjustment As on Leave Encashment 781,755, ,567,614 (154,965,354) - 821,357,804 Gratuity and Pension Fund 9,829,898,334 3,000,000,000 (665,305,537) 595,902,144 12,760,494,941 Staff Security Fund 1,632,609, ,000,000 (356,908,371) 1,875,701,464 Staff Medical Earning Fund 370,432, ,613,782 (133,164,269) (366,408,130) 231,473,695 Diminution in Value of Investment in Shares 63,550,000 - (16,000,000) - 47,550,000 Provision for Advance Recoverable 10,329, ,329,878 Provision for Doubtful Loans 10,000, ,000,000 Nuismatic and Medallion Coins 22,465, ,465,793 Provision for Non Moving Metal Stock 8,716, ,716,000 Provision for Unissuable Note Stock 3,775, ,775,258 Provision for Other Investments 1,198,146,310 - (250,501,310) - 947,645,000 Provision for Building in Construction 3,352, ,352,949 Total 13,935,032,213 4,155,181,396 (1,576,844,841) 229,494,014 16,742,862,783 NOTE - 22b: Contingent Liabilities and Commitments PARTICULARS As on As on Letters of Credit 33,872,646,191 41,380,802,027 Guarantees Issued - - Unclaimed Account Transfer to P/L Account 100,066, ,066,715 Capital Commitment (Construction of New Buildings and related Works at Baluwatar & Thapathali) 42,229,656 13,045,733 Total 34,014,942,562 41,493,914, Contingent liabilities in respect of Letter of Credit (L/C) are determined on the basis of LCs remaining unexpired at the Balance sheet date after adjusting therefrom the margin retained by the bank. In addition to above, Letter of Credit opened for various projects of Nepal Government for which grants is received from various donor agencies, liability of such letter of credit is met directly by the donor agencies, hence it is not shown as contingent liabilities of the bank. NOTE - 22c: Contingent Assets PARTICULARS As on As on Insurance claim lodged with Rastriya Beema Company against the loss of Property caused by Mega Earthquake 2072 Baisakh 11,322,000 - Total 11,322,000 -

19 NEPAL RASTRA BANK Notes forming part of the Statement of Comprehensive Income PARTICULARS NOTE - 23: INTEREST INCOME For the Year Ended For the Year Ended Foreign Currency Financial Assets Treasury Bills & Deposits 17,359,935,344 14,836,956,104 SDR Holding & Asian Clearing Union - - Sub-total 17,359,935,344 14,836,956,104 Local Currency Financial Assets Government Securities 442,231, ,532,822 Investment in Financial and Other Institutions 454,786, ,226,608 Overdraft to Government - - Loans and Refinance 77,423,413 76,425,226 Sub-total 974,441,197 1,482,184,656 Total Interest Income from Financial Assets 18,334,376,541 16,319,140,760 NOTE - 24: COMMISSION INCOME Foreign Currency Financial Assets On Currency Exchange 16,827,248 2,089,018 Local Currency Financial Assets Government Transaction & Other services 54,382,228 59,386,491 Total Commission Income from Financial Assets 71,209,476 61,475,509 NOTE - 25: INTEREST EXPENSES Foreign Currency Financial Liabilities SDR Allocation & ECF Loan 5,692,245 9,588,339 Others 203,547 (19,556) Sub-total 5,895,791 9,568,784 Local Currency Financial Liabilities Government Securities 143,576,270 34,885,548 Sub-total 143,576,270 34,885,548 Total Interest Expense on Financial Liabilities 149,472,062 44,454,332 NOTE - 26: AGENCY AND SERVICE CHARGE Foreign Currency Liabilities Service Charge - - Commission 27,075,395 21,522,886 Sub-total 27,075,395 21,522,886 Local Currency Liabilities Agency Expenses 157,958, ,524,107 Sub-total 157,958, ,524,107 Total Agency and Service Charge 185,034, ,046,993 Agency Expenses Includes Agency Commission Paid to the Following Banks for Operating Government Accounts. Nepal Bank Ltd. 55,800,000 91,200,000 Rastriya Banijya Bank 92,100,000 57,300,000 Nepal Bangladesh Bank - - Everest Bank Ltd - - Total 147,900, ,500,000

20 NEPAL RASTRA BANK Notes forming part of the Statement of Comprehensive Income PARTICULARS NOTE - 27: OTHER OPERATING INCOME For the Year Ended For the Year Ended Income from Mint (Sale of Coin) 341, ,237 Gain from Sale of Precious Metals and Coins 24,708,491 76,605,926 Fine/Penalty Charge 24,538,938 10,514,729 Profit from Sale of Assets 4,470, ,484 Dividend Income 7,365,111 6,767,324 Provision on Investment Wtitten Back (Net) 255,301,310 18,208,463 Project Income 17,537,099 5,322,268 Grant Income 115, ,446 Miscellaneous 51,832,492 68,742,324 Total 386,210, ,656,200

21 NEPAL RASTRA BANK Notes forming part of the Statement of Comprehensive Income PARTICULARS Note NOTE - 28: GENERAL, ADMINISTRATIVE EXPENSES & PROVISIONS For the Year Ended For the Year Ended Staff Costs 28 a 5,707,985,227 5,687,544,456 Depreciation and Amortization 86,503,030 86,188,938 Directors Fees and Expenses 5,100,612 4,725,420 Note Printing Charges 1,080,986, ,518,005 Mint Expenses 263, ,569 Security charges 38,502,214 18,647,239 Remittance Charges 42,769,892 53,253,861 Travelling Expenses 207,996, ,231,742 Insurance Charges 83,812,263 70,990,482 Repair & Maintenance 33,834,202 13,032,059 Provisions on Loans & Advances, Investments, etc. 28 b - 2,500,000 Miscellaneous 28 c 405,707, ,242,387 Total 7,693,461,579 7,557,268, a Staff Costs Salary 606,857, ,234,121 Allowances 545,212, ,374,938 Provident Fund Contribution 62,287,668 58,215,591 Staff Welfare (Including Medical Fund Contribution) 360,613,782 69,585,942 Staff Welfare Provident Fund 335,500, ,000,000 Pension & Gratuity Fund 3,000,000,000 3,255,535,548 Staff Security Fund 600,000, ,145,449 Staff Leave Compensations 194,567, ,580,127 Others 2,946,309 8,872,739 Total 5,707,985,227 5,687,544, b Provision on Loans & Advances, Investments, etc. Provision for Unissuable Note Stock - - Provision for Retired Staff Insurance Premium - - Provision for Doubtful investment and Others - 2,500,000 Provision for Sundry Accrued - - Total - 2,500, c Miscellaneous Expenses Banking Promotion 90,851,636 70,206,236 Audit Fees and Expenses 1,305,569 1,555,696 Sundry Balances Written Off - - Assets Written Off 191,212 39,854 Others 313,359, ,440,602 Total 405,707, ,242,387

22 NEPAL RASTRA BANK Notes Forming Part of the Statement of Financial Position PARTICULARS As on As on NOTE - 29: CASH AND CASH EQUIVALENT Foreign Currency Cash and Bank Balance 36,182,115,845 32,407,083,933 Foreign Currency Time Deposits 259,985,667, ,945,737,986 Local Currency in Hand 3,703,331,845 6,432,623,698 SDR Holdings 4,119,794,209 5,488,119,248 Investment in Treasury Bills/Notes 199,342,298, ,483,620,913 Investment in Fixbis 7,172,535,534 7,449,373,607 Investment in Repurchase Agreement (Repo) 58,125,602,000 40,110,588,469 Total 568,631,345, ,317,147,855

23 Nepal Rastra Bank NFY 2071/72 (2014/15 AD) NOTE 30: General Information, Significant Accounting Policies and Other Explanatory Disclosures A. General Information and Significant Accounting Policies 1. Incorporation Nepal Rastra Bank (NRB), the Central Bank of Nepal, was incorporated under Nepal Rastra Bank Act, 2012 as superseded by NRB Act The Bank is domiciled in Nepal and its central office is located at Baluwatar, Kathmandu. The Bank s jurisdiction is spread throughout the country. The main activities of the Bank include: Formulating necessary monetary and foreign exchange policies. Issuing of currency in circulation. Promoting stability and liquidity required in banking and financial sector. Developing a secure, healthy and efficient system of payment. Regulating, inspecting, supervising and monitoring the banking and financial system. Promoting entire banking and financial system of Nepal. 2. Fiscal Year The financial statements relate to the fiscal year 2071/72 i.e. 1 st Shrawan 2071 to 31 st Ashadh 2072 corresponding to Gregorian calendar 17 th July 2014 to 16 th July The previous year was 1 st Shrawan 2070 to 32 nd Ashadh 2071 (16 th July 2013 to 16 th July 2014). The corresponding information presented in the financial statements for the previous year are rearranged and reclassified in accordance with IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors", wherever necessary. 3. Directors Responsibility Statement The Board of Directors of the Bank is responsible for preparation and presentation of the bank s financial statements and for the estimates and judgments used in them. The Board has approved the financial statements for the year ended 31 st Ashadh 2072 on Poush 07, 2072 (December 22, 2015). 4. Controlling Body The controlling body of the Bank is the Government of Nepal (GoN) holding 100 percent of its capital. In the normal course of its operations, the Bank enters into following transactions with GoN and state controlled enterprises/entities: Acting as the fiscal agent and financial advisor of the Government; Acting as a banker to the Government; Acting as the agent of Government or its agencies and institutions, provide guarantees, participate in loans to Government and related institutions; Acting as agent of Government, the Bank issues securities of Government, purchases unsubscribe portion of any issue and amounts set aside for the Bank; Acting as the agent of Government, the Bank manages public debt and foreign reserves. Page 20

24 The Bank does not ordinarily collect any commission, fees or other charges for services, which it renders, to the Government or related entities except where agreement states otherwise. Transactions with the Government and state controlled enterprises/entities, outstanding balances and commitments are not disclosed in consonance with IAS Basis of Preparation The significant accounting policies applied in the preparation of financial statements are set out below. These policies are consistently applied to all the years presented, except for the changes in accounting policies presented in para 7 below. Financial statements components and presentation The financial statements comprise the Statement of Financial Position, Statement of Comprehensive Income shown in one single statement, the Statement of Changes in Equity, the Statement of Cash flows and the notes to the accounts. The financial statements are prepared, as far as possible, in accordance with the International Financial Reporting Standards (IFRS). The deviations, if any, from IFRS are noted wherever applicable. The standards that are not fully complied with included IAS 39 Financial Instruments Recognition and Measurement, IAS 28 Investment in Associates, IAS 27 Consolidated and Separate Financial statements, IAS 16 Property, Plant and Equipment and IAS 19 Employee Benefits. Assets and liabilities are presented in the Statement of Financial Position in the order of their liquidity. Expenses are classified as per their nature. Cash flow information is prepared, on a cash basis, using the indirect method. Basis of Recognition and Measurement The financial statements are prepared on an accrual basis of accounting and interest income is recognized in the effective interest rate method. The financial statements are prepared on the historical cost measurement basis except for the following material items in the Statement of Financial Position. Non-derivative financial instruments at fair value through profit or loss are measured at fair value. Available for Sale financial assets, except for equity investments whose fair value are not available, are measured at fair value. Derivative financial instruments are measured at fair value. Inventories are measured at cost or net realizable value whichever is lower. Gold investment assets other than Inventories are measured at fair value. Gratuity and Pension Fund and Staff Security Fund are measured at present value of Defined Benefits Obligation. Functional and Presentation Currency The financial statements are presented in Nepalese Rupee, which is the Bank's functional currency. The figures are rounded to nearest integer, except otherwise indicated. Use of Estimates and Judgments The preparation of financial statements requires management to make critical judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of the assets, liabilities, incomes and expenses. The actual result may differ from these estimates. Management believes that the underlying assumptions are appropriate and that the financial statements present the financial position and results fairly. Page 21

25 Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future period affected. Information about assumptions and estimation that have a significant risk of resulting in a material adjustment within the next financial year are: Key assumptions used in discounted cash flow projections Measurement of defined benefit obligations Provisions and contingencies Determination of net realizable value Determination of useful life of the property, plants and equipment Determination of capitalization value of the intangible assets 6. Significant Accounting Policies i. Revenue recognition Revenue is recognized when it is probable that the economic benefits associated with the transaction will flow to the Bank and the amount of revenue can be measured reliably. Revenue is not recognized during the period in which its recoverability of income is not probable. Accordingly, interest income from certain banks and financials which are declared as problematic and receipt of interest from which is not forthcoming are not recognized. Interest incomes are recognized on effective interest rate method whereas other incomes are recognized on an accrual basis of accounting. ii. Financial Instruments The financial instruments, consisting of financial assets and financial liabilities, are segregated between foreign currency and local currency items. Financial assets and liabilities are set off and net amount presented in the Statement of Financial Position when and only when, the Bank has a legal right to offset the amount and intends either to settle it on a net basis or to realize the asset and settle the liability simultaneously. a. Financial Assets All financial assets are recognized initially on trade date, which is the date when the Bank becomes a party to the contractual provisions of the instruments except for Loans and advances which is recognized on the date of origination. Financial assets are derecognized when the contractual rights to the cash flows from the asset expire, or the right to receive the contractual cash flow in which substantially all risk and rewards of the ownership of the financial assets is transferred. Any interest in such transferred financial assets that are created or retained by the Bank is recognized as a separate asset or liability. Financial assets (Non-derivative) are classified into the following categories: (a) Financial assets at fair value through profit or loss, (b) Held to maturity, (c) Loans and advances and (d) Available for sale. Financial assets at fair value through profit or loss Financial assets are designated as at fair value through profit or loss if the Bank manages such investments and make purchase and sale decisions based on its fair value in accordance with investment strategy. Attributable transaction costs and changes in fair value are taken to revenue. Page 22

26 Held-to-Maturity Financial Assets Held-to-maturity asset are financial assets with fixed or determinable payments and fixed maturity (e.g., debt securities) that the Bank has the positive intent and ability to hold till maturity. Held to maturity financial assets are recognized initially at fair value plus any directly attributable transaction cost. Subsequent to initial recognition, held to maturity financial assets are measured at amortized cost using effective interest rate method less any impairment losses. Loans and Receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They typically arise when the Bank provides loans; investment in debt instruments and deposits held in other banks with no intention of trading or making short-term profit and comprise loans and advances including bonds purchased at original issuance. They are initially recognized at fair value plus any directly attributable transaction cost. Subsequent to initial recognition, loans and receivables financial assets are measured at amortized cost using effective interest rate method less any impairment losses. Loans and receivables comprise cash and cash equivalents, trade and other receivables, loans provided to employees. Available-for-Sale Financial Assets Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or not classified in any of the above category. Available-for-sale financial assets are recognized initially at fair value plus any directly attributable transaction cost. Subsequent to initial recognition, available-for-sale financial assets are measured at fair value, as far as such fair value is available, and changes therein, other than impairment losses which are recognized in other comprehensive income and presented in the fair value reserve in equity. When an investment is derecognized, gain or loss accumulated in equity is reclassified to profit or loss. Available-for-sale financial assets comprise investment in equity instruments. b. Financial Liabilities All financial liabilities are recognized initially on the trade date, which is the date that the bank becomes a party to the contractual provisions of the instrument except for Debt securities which are initially recognized on the date that they are issued. A financial liability is derecognized when its contractual obligations are discharged, cancelled or expires. Non derivatives financial liabilities are classified into the other financial category. Such financial liabilities are recognized initially at fair value less any directly attributable transaction cost. Subsequent to initial recognition, these financial liabilities are measured at amortized costs using effective interest method. c. Fair value The fair value of a financial instrument is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties at an arm s length transaction. Quoted market values represent fair value when a financial instrument is traded in an organized and liquid market. Where quoted market values are not available, fair values are estimated by other techniques such as discounted cash flows etc. Page 23

27 d. Impairment Losses The Bank recognizes the impairment of financial assets in case there is objective evidence that the assets have been impaired. Impairment of an individual asset is tested at each balance sheet date in case there is an indication of such impairment. iii. Currency in Circulation Currency in circulation represents notes issued by the Bank as a sole currency issuing authority in Nepal. Currency notes issued by the Bank are legal tender under the NRB Act This represents the liability of the Bank towards the holder of the currency note. The liability for notes in circulation is recorded at face value in the balance sheet. These liabilities are supported by assets including foreign currency, foreign securities and Government securities etc. as permitted by Nepal Rastra Bank Act The Bank also issues coins of various denominations for circulation. However, currency circulation liability does not include the liability on account of coins in circulation. iv. Transactions on Repurchase Obligations (Repo) and Reverse Repo Repurchase (Repo) and reverse repo of securities are recorded as follows: a) Securities sold subject to repurchase arrangements (Repo) are recorded as investment in Government securities. The obligation to repurchase is shown as liabilities for securities sold under agreement to repurchase and the difference between the sale and repurchase value is accrued on a pro rata basis and recorded as expense. b) Securities purchased under agreements to resell ( reverse repos ) are recorded as loans and advances to other banks or customers, as appropriate. The difference between sale and repurchase price is treated as interest and accrued over the life of the agreements using the effective interest method. Securities lent to counterparties are also retained in the statement of financial position. v. Foreign Currency Ttransactions and Balances Ttranslations Income and expenditure denominated in foreign currency are translated into Nepalese Rupees on the basis of exchange rate prevailing on the value date. Assets and liabilities in foreign currencies as at the yearend are translated into Nepalese Rupees on buying exchange rate prevailing on the balance sheet date. Exchange differences are taken to revenue. An amount equivalent to the net exchange gain /loss during the year is transferred to/from Exchange Equalization Fund through Statement of Comprehensive Income. vi. Gold Replacement Fund Gold Replacement Fund is created for the purpose of replenishing the stock of gold and silver sold. An amount equivalent to the cost price of the gold or silver purchased is transferred from Gold Replacement Fund to General Reserve account. vii. Gold and Silver (other than inventories) Gold and Silver other than those held as inventory is stated at market value and any appreciation or depreciation with respect to the cost is taken to/from Gold and Silver Equalization Reserve through Statement of Comprehensive Income. Page 24